They say friends and family find it easier to get favors. Borrowing or asking for money from someone is always a decision that should be made with the utmost caution. Especially when this transaction is between people who have a close relationship as in the case of friends and family. With the intimacy, the collection of the loan can become an even more complex decision. But do you know how to make loans between friends and family?
How Loans Work Between Friends and Family
What most people do not know is ” what is the loan between friends and family “. The loan between individuals also obeys some rules. Both the borrower and the borrower can get along well with well-specified rules in this type of transition. Lending money to those you love besides being a good initiative for the economy is a way to help those who need it. This action can also be a good investment for anyone looking to earn extra money with interest.
Lend money to friends and family can be a good investment? Can! But despite having few risks and the return is almost guaranteed, it is necessary that both parties know how this type of transaction works. First of all, it is necessary to make a contract. Many people do not like this process as it is about lending money to someone they know. However, the two sides will feel more secure when everything is timtim by timtim – specified.
Hiring a friend or private lawyer is another way to ensure that everything goes as planned and that neither side gets hurt. In addition, this professional will help define the best way for the transaction to take place.
Depending on the value of the loan, both the debtor and the person lending the money must inform the amount in the Income Tax. The lender should be aware since, if interest is charged, there will be an incidence of Income Tax on the profit of this operation.
Do everything in the most correct way possible. It is important that all information about the loan is in the contract. This operation must be beneficial to both parties. It is not necessary to fear lending money to an acquaintance. Besides being an act of generosity can also be the best way to keep your money spinning.
Can I charge interest on the private loan? It’s cool?
Another question that can arise when it comes to lending between individuals is the collection. Due to intimacy, charging can be a problem. A contract can help you in this endeavor, but it is necessary to know exactly how you will conduct this negotiation.
The friend lender may, contrary to what many people think, even collect interest from the beneficiary. In Brazil, the current legislation foresees this collection and even say how much you should charge.
Under Articles 586 to 591 of the Civil Code, the funder should not charge more than 12% per year, which would be equivalent to 1% per month. This amount is valid for any type of loan, be it in banks and financial or personal.
The most reasonable, according to experts is to charge the amount you would receive if you left the money invested in a financial institution, a savings, among others. If the loan is risky, for a person with a negative CPF for example, you can still increase this amount a bit to earn a profit.
Why loans to friends and family can be a good deal
There are several reasons why these loans are great deals. The first one is profitability. It can have a higher return than many investments, especially at risk as new companies.
There is still security that the lender will be paid. As the parties know each other, this transaction and the charge may be quieter. The beneficiary still has more freedom to renegotiate if necessary.
You must be careful, of course. Making a good contract can save you from future problems. It is important to know exactly who you are lending to. Beware of the fine mesh! Both those who received the appeal and who invested money, must declare correctly in the income tax.
Taking these care for sure will lend the benefit to both.
Currently in Brazil, several sites and credit platforms have been launched for investors who make alternative loans such as crowdfunding and peer to peer lending loans. Know how the loan works between individuals and help your friend or relative without worries.